Question Two

　　This question was based on a scenario about the appointment of a new chief executive of Tomato Bank， George Woof，and a number of problems that arose with his appointment，his salary and his pension arrangements. Parts （a）and （b）were done quite well overall but part （c）was done poorly by most candidates. Question 2 was，nevertheless，the most popular and best-answered question in section B of this paper.

　　In part （a），candidates were required to study the case to find the points to criticise （a level 3 intellectual outcome）the Tomato Bank remuneration committee in agreeing Mr Woof’s reward package. I was pleased to see that many candidates were able to do well on this question with case analysis skills being well demonstrated by successful candidates. On questions containing verbs such as ‘criticise’，careful analysis of the case is usually essential in preparing good answers.

　　There were two tasks in part （b）：to describe the components of a reward package and then to explain why a more balanced package should have been used. The first task，largely bookwork，was done better than the second. The marks for the balanced package involved explaining，in context，about alignment with shareholders’ interests，about past and future performance and similar points. There were ample points in the case to pick up on for these marks and careful study of the case was rewarded with higher marks than those who merely relied on ‘lists ’of points.

　　It was part （c），however，that was badly done by most candidates. Although Mr Woof was legally entitled to receive the pension value，the question specifically asked candidates about the ethical case. Mr Woof could have accepted a reduction in the value of his pension in recognition of his failure as CEO. This was done poorly by a majority of candidates thus somewhat underscoring the importance of developing ethical reasoning skills in preparation for P1 exams.

　　Question Three

　　This case scenario drew on recent changes to the COSO guidance from 2009. It describes some of the contents of the guidance （it was not necessary to know about it prior to the exam）and then introduces a conversation between two journalists. Conversations have been used before in P1 scenarios and they are used to explore differences of opinion over certain issues which then may be asked about in the requirements.

　　Part （a）contained two tasks. The first，to distinguish between rules and principles-based approaches to internal controls. This was quite well answered overall although some became confused in their answers with rules and principles-based approaches to corporate governance in general. The second task was more challenging which was to discuss the benefits to an organisation of a principles-based approach. This ‘to an organisation’ was important as it placed a particular perspective on where the benefits were obtained……

　　In part （b）some less well-prepared candidates introduced a bullet list of ‘purposes of internal control’ from one or other of the study texts. This wasn’t quite what the question was asking. In the context of the case， candidates were required，in response to Mr Rogalski’s comment on industry specificity，to comment on the non-industry specific advantages （such as high quality reporting，efficient operations， compliance， etc.）。

　　The COSO guidance used the term ‘unmonitored controls tend to deteriorate over time’and the second part of （b）required candidates to explain what this meant. Most candidates who attempted this were able to provide something here but others seemed unprepared to explain a phrase that they had perhaps not encountered before despite it being an important theme in internal control.

　　Part （c）drew upon another part of the COSO advice. Again，the COSO advice was simply used to introduce a notion that should have been familiar to a well-prepared P1 candidate as it was on internal audit. The first task on defining internal audit testing was done well by many candidates but the second task less so.

　　Question Four

　　This question was on insider-dominated （family）businesses，professionalism and ethical behaviour. The case described a situation about a small but established family business，their auditor and the son of the couple whose business it was. There was evidence that the son，Ivan，had stolen inventory from his parents’business and the auditor，Mr Shreeves，had become aware of it.

　　Part（a）invited candidates to explain the differences between a family business and a public company. In particular，this was about governance. It drew on content that should have been familiar to candidates that had carefully studied the study texts and many candidates were able to gain some marks for this distinction.

　　There were two tasks in part （b）.The first was seemingly more challenging than the second. The second task was to describe the fundamental principles of professionalism and most well-prepared candidates were able to do this. Fewer were able to explain the position of professionals in society and the importance of the public interest to a professional like Mr Shreeves.

　　Part （c）was done poorly overall. As with Q2（c），this part required candidates to bring their ethical reasoning skills to bear on a problem. Mr Shreeves faced a dilemma on how to approach the issue of Ivan with Ken and Steffi Potter. There were a number of professional and ethical issues that were relevant to his decision and it was a discussion of these that was required. More detailed preparation for ethical reasoning tasks would have benefited candidates and this should represent a challenge to tutors and future P1 candidates.

　　ACCA2010年12月考试时间：12月6日-15日

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